Feb. 5 (Bloomberg) -- Taiwan’s financial regulator said it has approved Chinatrust Commercial Bank to sell the first yuan-denominated bonds on the island, which is seeking to become an offshore hub for the currency.
The planned sale by the lender, Taiwan’s biggest credit-card issuer and a unit of Chinatrust Financial Holding Co., would raise the equivalent of NT$5 billion ($169 million) and is pending central bank approval. The bonds are expected to be sold after the Lunar New Year holiday, which ends Feb. 17, Jean Chiu, deputy director general of the Financial Supervisory Commission’s banking bureau said at a press conference today in Taipei. The maturity of the debt would be two to five years.
Issuance of yuan notes in Taiwan, dubbed Formosa bonds by the commission, follows an August agreement with China that paved the way for clearing of the currency on the island and interbank trading. Taiwan’s central bank announced today 45 lenders have opened accounts with the Bank of China’s Taipei office and that yuan may be deposited at the island’s lenders from tomorrow.
Taipei-based Mega International Commercial Bank Co. has plans to apply for a yuan bond issue in Taiwan, the FSC said.